Canada Moves Forward On Aircraft ‘Luxury’ Tax


Canada has now formalized its intent to impose a “luxury tax” on new “personal” aircraft and it will be tacked on to virtually every factory-fresh plane sold in the country, assuming it’s enacted. The Justin Trudeau Liberal government included the tax in its budget tabled earlier this week and as written will add tens of thousands of dollars to the cost of even the most basic general aviation aircraft. The government has set the luxury limit for aircraft at $100,000 CAD and there are few new aircraft available at that price, which is currently about $80,000 USD. It is calculated at the lesser of 10 percent of the full value of an aircraft or 20 percent of the value more than $100,000. For a $600,000 CAD Cessna 172, that would be $60,000 plus up to $7,800 in federal and provincial sales and value-added taxes.

Canadian aviation groups have lined up against the tax, saying the luxury threshold is far too low and the application of the tax is muddy. The government is exempting passenger aircraft with 40 seats or more and smaller aircraft used commercially. That, says the Canadian Business Aviation Association, is at odds with the country’s tax laws, which don’t distinguish commercial and personal aircraft based on size. There is also confusion on whether imported used aircraft will be taxed as new. The government has promised more details on the implementation of the tax before it becomes law.

Russ Niles
Russ Niles is Editor-in-Chief of AVweb. He has been a pilot for 30 years and joined AVweb 22 years ago. He and his wife Marni live in southern British Columbia where they also operate a small winery.

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  1. This from Trudeau Jr. whose only job before becoming Prime Minister was as a snow board instructor and part time drama teacher. He is a trust fund baby who has never had to produce anything useful to survive like the rest of us. And now he will destroy thousands more jobs and businesses just as he has been doing with his other social justice policies.

  2. Sure, why not. Give all your money to the crown. The king punishes you if you try and step out of serfdom.

  3. I have some Canadian friends who own home-built experimental aircraft, which brings the question about how the law would address that type of craft. How would they determine the value of the plane, often purchased in pieces that would be valued at less than the CAD $100k, but would assemble into something totaling more. Also, I would be interested to see how they define “commercial” use. Carrying passengers? Aerial photography? Private pipeline patrol? This has all the earmarks of the typical money grab from a liberal government who perceives airplane ownership as a rich-man’s toy.

  4. Similar antics by government-employed power trippers back in the USA’s Cartertopia years awakened me to the willful disunderstanding by leftists of capital and cash flow, and the embrace of government overreach. They should be exiled to somewhere their ideals are in practice. There are many choice destinations available. You can tell by the massive outflow of prospective immigrants headed for the USA.

  5. Is Canada also going to put a luxury tax all boats and cars (costing more than $20K) as nobody needs them either?

    • Yes, apparently. This news story says that the tax applies to cars with a threshold of $100k, and to boats with a threshold of $250k (Canadian dollars, of course). Source: www ctvnews ca /politics/luxury-tax-on-yachts-cars-and-personal-aircraft-laid-out-in-new-federal-budget-1.5393511

      • So a $249k boat is considered reasonable but an airplane costing $100k is an excessive luxury? Seems like there were some boat owners in the brilliant committee coming up with this tax grab.

  6. So a rancher’s twin used to check on cattle on the range, BC Hydro’s workhorse MU2 back when and BCTel’s workhorse airplane, MacBlo’s fleet back when, etc. are ‘luxuries? In reality all are business tools. MacBlo flew to its forestry operations scattered along the coast, BCTel did a milkrun through BC to deliver people and parts – as far as NE BC, getting some of the people back to Vancouver the same day, BC Hydro took people and parts to its various power dams and such – as far as NE BC. GTE did similar out of Everett WA to its telephone facilities across the northwest states of the US. Generous Motors had several CV580s flying parts and people around to keep their automobile manufacturing plants producing. Oh, there’s also the matter of the many areas of Canada and Alaska that do not have roads most of the year, flying around NW ON and NE MB was educational – most airports were on tribal reservations (‘jefe’ Trudeau Jr claims to want to help them?). Gummint are Marxist grabbers.

    • A small twin for safety in the hills, I would want – a perhaps a twin helo like the TwinStar. Either way, a quick way to keep an eye on things as predators including rustlers are about. (A cowboy went missing a few years ago in the Caribou, his horse was found with its bridle broken. Police suspect foul play. I say rustlers are a likely possibility.) A cowboy can check health of individual cattle but takes several days to cover the range. Aerial surveillance spotting rustlers could warn the cowboy before he blunders across them. And deliver medicine or replacement equipment or extricate an injured person.)

  7. Very few of those taxes would be collected if enacted. As it is, it’s only on new aircraft. Most buy used. And I suspect new aircraft buyers will purchase them in the U.S., register them there, and then “visit” Canada in those planes. Be interesting to see if they try to collect it on newly completed homebuilt aircraft. They probably never even considered that. Liberals will always be looking to find ways to fund their endless programs.

  8. BREAKING NEWS: Joe Biden just commented, “That’s a great idea, why didn’t I think of that.”

  9. Dispel the idea the aircraft owners or buyers for that matter are rich. This underscores the fundamental misunderstanding of aircraft ownership. If you knew how much an owner, or builder pumps into an economy in a year you would want to reduce the cost of new planes. Tools, annuals, fuel, hangar, insurance, landing fees, cars, hotels, restaurants, instruction, maintenance and repairs. The list goes on. I know my “cheap” plane costs at least $500/mo before it ever flies and before I get one of those 10K annuals. I don’t envy those guys who can actually afford a new aircraft, adding to the fleet only increases access to services and improves the community. To make a fundamental distinction between GA and Commercial is blind to the facts. All aviation is valuable as economic stimulus or haven’t we leaned anything from last years travel dip. No, they never learn anything, just more rhetoric, planes = rich and rich – evil. mkay, but what really happens is squeezing out the the bottom until only the elite are left. I am enjoying flying GA while I still can, someday I will sit on my porch as an old man looking to the quiet sky and tell stories of the “good ol’ days”.